Are you a salaried Employee? Do you contribute a portion of your monthly salary towards Employees’ Provident Fund (EPF)? Are you aware that your employer also contributes a matching amount towards your EPF account? Do you know about the various components of your employer’s PF contribution? Are you aware of ‘how interest is calculated on your monthly subscriptions to Provident Fund?

I was in need of the EPF statement to resolve all the above queries and answer them in a simple and easy to understand manner. Since I am a self employed individual, I can’t contribute to Employees provident Fund and do not have online access to EPF UAN (Universal Account Number) member portal. (You can view or download your EPF statement online @ EPFO’s UAN Member Portal)

Many thanks to one of my good friends for sharing his latest employees’ provident fund statement and that has helped me in preparing this post. Before analyzing the EPF statement and how EPF’s interest is calculated, let us first understand the various components of EPF.

What are the Components of my Employees Provident Fund (EPF account)?

If you take out your monthly pay-slip and check, you can understand that every month 12% of your “salary” is contributed towards EPF account. Your total monthly contribution is routed towards Employees’ Provident Fund.

Your employer also contributes 12% of the salary to your EPF a/c. But your employer’s monthly contribution is routed towards various components of PF.

Below are the amendments/changes made to EPFO’s EPS scheme in August 2014. (EPFO is Employees’ Provident Fund Organisation)

EPF a/c is mandatory if your salary is less than Rs 15,000 pm. Previously this amount was limited to Rs 6,500 pm. (The definition of SALARY for EPF calculation is : Salary = Basic + Dearness Allowance)

As mentioned above, you contribute certain portion of your monthly salary towards EPS (Pension). You receive the pension amount from this Employees’ Pension Scheme. The minimum pension to a pension holder is now decided as Rs 1,000 pm.

The EPF’s account holder can nominate any family member as a nominee. On any unfortunate event (on death), the family member of the EPF subscriber will receive Rs 3 Lakh as insurance coverage. Previously this was around Rs 1.56 Lakh only. (Do not forget to inform your nominee about this provision).

The minimum contribution used to be 12% of Rs 6,500 in most of the employees’ cases, now this is 12% of Rs 15,000 pm. So, you may now be depositing Rs 1,800 towards EPF. Whereas, you employer may now be contributing Rs 550 pm and Rs 1,250 pm towards EPF and EPS (pension) respectively.

Kindly note that the above figures are for minimum contributions. Check your pay-slip or EPF statement to know about your employer’s and your contribution percentages.

Understanding the components/sections in EPF online Statement:Above is the latest EPF online statement (Sep 2012 to Dec 2014) that I have received from my friend. Let us understand the different sections available in EPF statement.

The first column (PARTICULARS) gives you the particulars of month-wise contributions, interest updated date and about the executed PF transfers/withdrawals (if any)

The second column has two sections which gives you information about your employer’s and your share towards EPF deposit.

With reference to the above EPF statement, you can observe that Rs 780 and Rs 239 (12% of Rs 6500 pm) used to be employer’s and Employee’s contributions towards EPF account. These are now (after September 2014) changed to Rs Rs 1,800 and Rs 550 pm respectively.

Employer’s contribution towards EPS account used to be Rs 541 pm and now it is Rs 1,250 (from October 2014 onwards). (Suggest you to check your statements too and understand more about the EPF and EPS contributions).

You can observe that my friends has changed the company and had claimed EPF transfer online. The online EPF transfer details are also available in EPF statement.

You can also observe that there are transactions towards “Interest updated” in the statement as on 31st March of every year. These are the interest payouts on the total monthly contributions. There won’t be any interest payout towards EPS contributions.

How is interest on EPF account is calculated?

Before explaining to you about the calculation of interest on EPF deposits, let us understand few relevant points regarding the interest calculation.

The rate of interest is notified by the central government periodically (every fiscal year). The rate of interest on EPF deposits for last three fiscal years are : EPF interest rate in 2012-13 was 8.5%, in 2013-14 it was 8.75% and for this fiscal year (2014-15) too it is 8.75%.

Interest Amount is calculated on the average monthly balance. EPF subscribers are eligible to get interest amount on their contributions and employer’s PF deposits.

The interest amount is calculated monthly but the total interest amount is credited once a year only. The credit payout generally happens at the end of March.

The accounting year followed by EPFO office is from March to February.

Let us now understand how the interest is calculated on EPF deposits. Let us consider the same EPF statement as the one given above. My friend had joined in his first job in a Private Limited company in September 2012. His company contributes 8.33% of his Basic salary as “EPF deposit” (Rs 239 pm) every month and 3.67% towards the EPS scheme (Rs 541 pm). (The 12% is subject to minimum of Rs 6,500 in 2012-13). His contribution was 12% of Rs 6,500 which was Rs 780 pm.

Let me put all these figures in MS excel and calculate the total interest earned on EPF deposits from September 2012 to end of March 2013.

Let me now explain about the calculation part. In the month of September 2012 the interest amount was zero because the available EPF balance was zero in the month of August 2012.

In Oct 2012, Rs 7.2 was the interest earned for September’s monthly contribution. We need to consider September month end balance (Rs 1019) and EPF applicable interest rate ( it is 8.5% in 2012-2014) divided by 12 months (we are calculating monthly interest amount). We need to repeat these calculations till March 2013. The total accumulated interest was Rs 152 and was credited on 31/Mar/2013 (as shown in EPF statement).

The total interest amount of Rs 152 was added to April month’s balance, along with the monthly deposits. Even after the recent amendments to minimum contribution amount, the interest calculation procedure has not changed.

So, suggest you to try these calculations based on your monthly Provident Fund deposits and understand how is interest calculated on your Provident Fund Account. (Leave your query if you need any assistance).

Income Tax Saving Benefits on EPF contributions:

Only your (employee’s) contributions towards EPF account are eligible for Income tax deduction under Section 80 C of Income Tax Act. If you have contributed for 5 years in EPF then there is no tax deduction but for less than 5 years TDS (Tax Deduction at Source) is deducted for EPF amount withdrawals.

Did you like reading this article? Did you find it informative? Do share this post with your friends. If you have any queries on EPF interest calculations, kindly leave your comment. Cheers!

Sreekanth Reddy

Sreekanth is the Man behind ReLakhs.com. He is an Independent Certified Financial Planner (CFP), engaged in blogging, financial counseling & property consultancy for the last 6 years through his firm ReLakhs Financial Services . He is not associated with any Financial product / service provider.
The main aim of his blog is to "help investors take informed financial decisions."

Dear sir,
Could you explain me about OB adjustment ?? [[OB Adjustment- ( AUTO APPENDIX BACK PERIOD )- IPR(Back Period) (2014-2015)-Contribution only]] what is mean by this sentence which is in bracket ??

What is the meaning of ” OB Adjustment- ( AUTO APPENDIX BACK PERIOD )- IPR(Back Period) (2014-2015)-Contribution only” …
and also my (employee) contributions and Employers contribution is not visible for a whole year. i.e. from 04-2015 to 03-2016. But this was visible in my EPFO Passbook when I viewed 2 months ago. Please help me to understand this, so that I can escalate if there is an issue in my accounts. Thanks

I had a query. I am in the process of joining a new firm. The salary structure offered is with a PF contribution of 10% instead of the regular 12%. When I asked the HR about this, they say that as a Bank they are permitted to have a 10% contribution to PF instead of 12% and they dont participate in pension plan. Could you please confirm if this can indeed be the case? My readings of the rules indicate that banks dont have any such exemption. Please confirm. Thanks

Dear Sir,
I want to withdraw my pf balance of previous employer 5 years not completed ,so I have to fill 15G ,In column no. 16 (Estimated income for which this declaration is made ) total pf amount to be filled
1.Please help me how to calculate total pf amount to be write in this column (deposit amount in pf showing Employee share 26,321 ;Employer share 10,504 and pension contribution is 13,427.
2.In column no 17 of 15G( Estimated total income of the P.Y) :how to filled this if my my monthly inland salary is 20,500 and Yearly CTC is 3LPA.
3.and please explain me column no 19. of 15G identification number of relevant investment /account ;what is to be write in NATURE OF INCOME ;SECTION UNDER WHICH TAX IS DEDUCTIBLE ;AMOUNT OF INCOME

Dear Yuyutsu..I am unable to comprehend your query. Whatever the outstanding balance in EPF a/c and EPS, will be paid to the PF member.
EPS can be withdrawn if the service period is less than 10 years.

When we transfer amount from one company to another looks like that previous balance is not considered while calculating the interest. Interest is only compounded on the current companies PF balance. Can you throw some light on this.

@Sreekanth I agree to your point that Interest should be calculate on the total accumulated balance.
Lets consider the snapshot in which Amount transferred in April 2014 of amount 8728 & 2670 towards employee & employer share respectively.
From the month of May onwards Interest should be calculated on Total Amount i.e, Amount deposited by this company + transferred amount.

Whereas thats not the case Interest is calculated only on the amount deposited by this company. The transferred amount not calculated in Interest calculation.

In my case X amount transferred from my previous account in Jun 2013. I did not receive any interest on that amount till now.

From the cases i read it looks either my understanding is not right or there is a catch in the system from the time UAN comes into the picture as this problem I observed only after that, prior to that I transferred my PF from 3 more companies & there is no issue in interest calculation.

1) When you transfer EPF/EPS from one company to another does EPS does not get transfer.
Even in the screen shot you mention it shows as 0.
Do we need to submit separate request to transfer EPS amount.

2) Can we withdraw EPS amount without withdrawal of EPF & without changing the company.

HI SIR I WORKED IN SPENCERS RETAIL INDIA LTD IN WARANGAL IN TELANGANA STATE FROM 2009 TO 2011. AFTER IN 2011 I RESIGNED . NOW I WANT TO KNOW MY UAN NUMBER… THE COMPANY DOESNT HAVE MY UAN NUMBER…IN 2014 ONWARDS UAN NUMBERS ATRE AVAILABLE.. HOW CAN I GET MY UAN NUMBER.. PLEASE TELL ME THE PROCEDURE..

Hi,
I changed my job and had transferred the PF balance to the new company. Even it is getting reflected in the statement from the epfo website. But when it comes to interest payment, it is not counting the previous balance for calculation.
For eg, if my balance is 150 Rs (100 from current company and 50 from previous company transferred in), interest is getting calculated only on the 100 Rs, that is, the current company’s contribution.
Is it like so? If so what is the point of transferring?
Can you please help.

Even I haven’t got interest amount credited to my EPF account. May is completed by today. Can you please let us know what’s going on in EPFO office, why interest is not being credited for 2015-2016 period.

I’m Srikanth reddy I have joined one organization as a HR I’m fresher to this job role Now my management has instructed me to enroll my self in PF and generate a UAN for myself and also instructed me to generate UAN of those employees who are yet to get UAN. Kindly guide in this regard. As a fresher I dont have any knowledge about PF.

I have served in IFFCO for 8 yrs. And left on 2013. Now I want to withdraw my EPF fund. How much can I withdraw? What are the TDS implications? Will I get interest for the last three years during which I have not contributed.

Dear Somanath,
If it is more than 36 months since you made PF contributions to that PF a/c then it would have become INOPERATIVE. But as per the recent govt’s notification, interest will be paid on INOPERATIVE a/cs too.
PF withdrawal is tax-free in your case.
If you are not employed now and not contributing to EPF scheme, you can withdraw full balance.
Kindly read:New EPF withdrawal forms.EPF withdrawal & new TDS rules.EPF inoperative a/c helpdesk.

Thank you very much Reddy Sir….. I am now employed and not contributing to EPF but contributing to NPS. So how much can I withdraw ? Can I transfer it to my PPF account or NPS account ? What other options are available for me ?

Dear Somanath,
Govt is contemplating to provide one time portability option (EPF to NPS and vice-versa), but haven’t yet announced it.
You can not transfer the funds to PPF account.
You have the option to withdraw full balance now.

Requesting your kind support for the above query.
Also, for my basic, I am sure a part of the amount will only be considered for PF & the remaining will be taxed. May I know the breakup of how much will be taxed ?

I think the formula is wrong. If the increment is equal to the EPF rate of interest, the formula fails.
Hence, kindly calculate (on my behalf) the corpus amount @ 60yrs for the below data. Thanks for the great support.

Dear Irshad,
Kindly share the correct formula then?
The reason I am not calculating is, this is all hypothetical and salary will not remain same and ROI will not remain same. There is no point in calculating the corpus.

Thanks Srikanth for the quick reply. But assuming the following data remains constant: May I know what will be corpus amount I would get at 60yrs on my EPF A/c.
Current EPF balance = 1516630
Basic Salary = 68852
VPF contribution= 88% (Company = 12%)
Salary Hike for next 20 years = 0%
EPF rate = 8.8% ( I assume for 2016)

Dear KRISHNAMURTHY,
You can request you employer to generate UAN for you as it is mandatory to quote UAN number on PF claims (if any).
Else, you yourself can generate it online.
Read: EPF UAN number – generate it online.

I got the point what is explained. My doubt is while we are withdrawing PF amount, the whole PF (EPF+EPS) amount will be returned or Only EPF ?
How we will get EPS back ?
Or If we apply for PF withdraw total amount (EPF+EPS) is returned ?
Is it compulsory for the employer to deduct amount for EPS ?

Assume that I quit my job in Sep 2016 and remain without any job for two months and apply for full EPF withdrawal. What happens to the interest part of the corpus as of Mar 2016 and contributions from Mar 2016 to Sep 2016. As the interest rate is decided after the end of the financial year i.e, Mar 2017, at what rate would my interest on my corpus calculated at the time of withdrawal (which happened before the interest rates were finalised).

I joined a company on April 1st, 2015, so basically the very first day of the fiscal year. As of today (4/21/2016), I see only 11 monthly entries in my PF account, though all of my 12 salary slips show the PF amount deducted. Shouldn’t there be 12 entries in my PF account for 2015? Also, I don’t any Interest Credit as such.

Dear Manish/Ankita..Suggest you wait for till May and check the statement (we all know what’s happening at EPFO).
If you still do not get to see the entries, you may first check with your employer and then submit a grievance at EPFO portal.

I have one doubt…I will be grateful if you can provide some inputs about it…my question is that in your point 4 u have said that full EPF accumulation can be balance can be withdrawn on some condition…
(i) Is that condition valid for all (for those having < 5 years of service )
(ii) is the amount withdrawn under these condition would be taxable…?

As per the new amendment regarding EFP. what is the benefit that employee will get from PF if he withdraw after his retirement apart from interest (Present interest rate is 8.1% per Annam).
and If the employee did not specify any nominee in PF and he served 50 years in the same organization and if he died (passed away). then where the 50 years PF amount will go.

Why should we have to wait till 58 years to consume our PF amount. any logic behind this amendment passed from the government?

Dear Yatheesh,
The legal heir(s) can claim the PF monies.
Kindly read latest rules, there are some modifications done: Latest EPF withdrawal rules with effective from 1-August-2016.
The logic is that we do not have any social security system in our country and most of the claims that EPFO are settling are not at retirement age, so govt’s idea is to encourage EPF members to save for their retirement life.

The above shown UAN statement found that there is a PF transfer from previous account. It seems the amount transferred only employee share + employer share but we don’t see anything about the previous EPS amount. It should be some amount credited in the EPS column right?

Dear Yuva..I am not sure if EPF passbook reflects the EPS transfer amount / settlement amount.
If you are employed, kindly check with your employer and let me know if this is possible? (I am not a salaried person, can’t check this, but will try to get info from my friends who are salaried individuals).

Dear Madhu Kant,
The interest will be credited on the accumulated balance.
But suggest you to withdraw the balance and re-invest prudently (if required) based on your investment objectives/requirements.

Very informative. Thanx a million.
After recent changes regarding PF withdrawal that have been effected, one question cropped up in my mind.
For example:
A ‘single’ woman employee who has worked for over 15 years and contributed to PF from the first month itself and has not withdrawn any money till date wants to quit job on health grounds at the age of 46. The amended rules says she won’t be able to withdraw all PF accumulation. If suppose something happens to her before she attains the age of 58, what is the use of the money lying in her PF account. She may need all her savings (including PF) for medical purposes. This seems ridiculous on part of EPFO or for that matter Government to act like Big Brother and decide that ‘One size fits all’. Anyone listening??

Dear MeYe,
One can make partial withdrawals for different purposes (one being for medical treatment). I definetly agree with you that they (govt/epfo) should have taken public feedback/employers’ inputs before framing new rules and making them effective.
Kindly read: EPF Partial withdrawal rules ..

I am working in Adecco india Holding Mumbai Branch. Having its head office at Bangaluru. Also my PF pertain to bangluru. Our pf has been deposited in Adecco Trust (Not in EPF no). now new rule has come after feb 2016 that entire amt cant be withdrawn except our contribution. So from whom can i apply after 58 years.

Hello, I want to know like if employee share is Rs.20000 & employee share is Rs.5000 approx and for service having 1.8 year , so can person eligible to withdraw the amount during the service(for repayment of loan). Is it possible.

hi Sreekanth, my office deducted epf from nov 2014 to march 2015 financial year (2014-2015) of rs.1800/month in my salary and i continuously working with same company now, i downloaded UAN passbook from epf website just two days back. according to my payslips, total epf deduction on (Nov 2014 – Mar 2015) is rs.9000/- rupees,but downloaded UAN passbook shows only 7200/- rupees of (Nov 2014-Mar 2015) financial year, passbook entry started from december 2015 only. i think my one epf has not credited
pls clarify me
thanks!

1. You work from 01-Jan to 31-Jan. Salary credited, say on 31-Jan only (where your EPF contribution) is deducted.
2. Your company/org deposits this with EPF sometime in February say on 10-Feb. I’m not going to look up exact guidelines by which an org has to deposit funds with EPFO after collecting/deducting from employees.
3. So, EPFO actually got your contribution (which was a result of your employment in January) in the month of February.

So, in essence your statement will always run one month behind your actual employment. No need to worry here.

I have a query, you have given a very good illustration with previous month’s balance is nil. How will the calculations be made, Let us say in case there is previous balance and also transfer as under at the time of start of year, details as under:
Employee Balance – Rs.10,000/- Employee’s share balance – Rs.9000/-
Intt on Employee Balance – Rs.4,000/-, Intt on Employee’s share – Rs.3,000/-
Transfer of Employee share Rs.15,000/-, Transfer of Employee’s share Rs.12,000/-
Intt on Employee share transfer Rs.5,000/- Intt on Employee’s share transfer Rs.4,000/-

My query comes, since I have both, when I reviewed my PF statement online, I find that the interest has neither been calculated on previous balance nor on the transferred amount. You advise will be helpful.
Kind regards
Dinesh Minocha

Dear Dinesh..What’s the difference between ’employee balance’ & ’employee share balance’ here. Unable to understand your point.
Kindly note that you can see the interest amount transaction generally in the month of March/April.

Dear Rahul,
You can submit the withdrawal form in the first week of April, so that you can get interest for the full FY (2015-16). Kindly note that interest for the previous FYs would have been already paid.

First thing first. Kudos to your wonderfully articulated article. A lot of people like me would have benefited with the nuances of EPF and the related stuff.

I have a query on EPF Interest.

What if some one decides to quit his job by 45 years or for the sake of argument say any time before the stipulated 58 years. When there is no more contribution into such an EPFO account with the holder being unemployed. What happens in this scenario? Would the interest still be getting credited on the Principal + Interest amount accrued so far year on year till 58?

I have query that you mentioned about TDS on withdrawal. I worked for a company for 6 months. Then I left it and now I don’t have any job. They have deducted TDS for the EPF contribution by employee too. So now if I don’t withdraw within 5 years then will I get this TDS back. Or there is any other way to get it back. Also if I withdraw in next financial year then what would be taxation on that amount given that I don’t have any other source of income.
Please help

Hi Sreekanth,
I have a query. You might be already aware of PF Trusts managed by some organizations.
My previous employer had its own trust for managing PF accounts. I was part of the organization for less than 4 yrs.
After joining new organization, I do not wish to transfer the PF to new org so that after completion of 5 yrs of maintaining the same PF account, I can withdraw completely without TDS from that PF account. Is that feasible.
If yes, what does Govt PF guidelines for these private trusts, state about them paying the annual interest on these accounts of old employees and till what period they can maintain.

[I am the same person who has asked a clarification
What will be my Interest earned for FY 2011-12, is it whole of 12000 and 10200 OR the difference in Int amounts from Previous Yr.]
[If we are suppose to consider the difference of interest of 2 years, that’s the reason for asking this question.]

There was very little difference in the both the years interest, whereas the employee and employer contribution had increased from 2010-11. I understand there was decline in int rate in 2011-12, even though difference of 87/- & 267 is too low. Do you think there was a mistake in debiting Interest in my a/c
Please comment on this.

I would like to know about the withdrawal amount,
when we apply for a withdraw of amount…so as per the instructions which i read i understand that i will get {employee share+employer share (8.33% EPS + 3.67% EPF)+Interest cal up to withdrawal date} , am i right?

Dear Sandesh,
For EPS withdrawal you need to submit separate withdrawal form, in addition to EPF withdrawal form.
Read : New EPF withdrawal forms..
One can withdraw pension (EPS) if service is less than 10 years.

Thanks for the informative and easily understandable post. I have one query. If one closes the PF before March 31st, that is before the interest for the fiscal year is credited, will he/she lose the interest for the entire year?

Dear Dinesh,
I believe that your understanding is wrong. The EPF subscriber would get the interest amount on all the contributions.
It is only when one stops contributing to EPF scheme, the interest would still be given for 36 months on the accumulated balance. After which the EPF a/c would be treated as an inoperative one.

Hi there, for example if I quit the company after completing 3 years and after that when I will apply to get my pf amount, will I get my pension amt as well with it as my employee was contributing towards pention part of amount

Thank youf for the exhaustive information about the EPF. I would like to know weather contribution made to UTI retirement benefit fund retirement option is eligible under sec80C. What is the min investment period and withdrawals are taxable?.

Dear Sanat,
Income tax deduction is available on the amount of investment in the scheme under Section 80 C of Income Tax Act, 1961. It has 5 year lock-in period. It is treated like a Debt fund for taxation purposes, so Long term capital gains tax rate @ 20% (with indexation) is applicable.

Firstly thanks for the information.
I have a query about when I quit my job and withdraw the entire PF do I get (EPS+EPF + interest) or (EPF + interest) and what happens to EPS in the second case, do I get any interest on EPS also if I receive it in my withdrawal.

Dear Zuni,
You need to submit separate withdrawal forms for EPF (Form 19) & EPS (Form 10c). Interest is paid on EPF contributions.
You will not get any interest on your EPS contribution.
You can withdraw EPS amount provided you have completed less than 10 Yrs of service. The withdrawal amount is calculated based on a formula.
To avail pension, you must complete 10 yrs of service and your age must be 58 yrs or above.

I have a query. My previous employer was maintaining the PF account as a trust and my current PF account with new employer is in RPFC.

I want to transfer the amount from previous emploer’s Trust to my current RPFC account. So my query regarding this is:

1. If I initiate the transfer now and it gets done before March 31 ,2016 i..e this financial year ending , then will I get the interest amount for this Financial Year also transferred ? or I will not get the Interest for this financial year?

Hi sir, u blog has been amazing..
My friend has worked for one year in pvt co. And she claimed the PF after resigning in a year..
Within 15 days she git a funds in her a/c but the amount is lesser than in it mentioned in EPF A/c..
As per site, emoloyee contribution is 17996 + employer contribution is 5676 = 23672.
But she got only 12935..
Pls advice..

At first, I would like to thank you for posting detail information on PF. My erstwhile employer was maintaining a PF trust and my accrued PF was transferred from trust to RPFC on 10th Oct, 2015. How RPFC will treat the transferred PF for computing interest? Will I receive interest on the transferred PF fund from 11th Oct, 2015 onwards? My current PF is deposited with the same RPFC office. Please clarify.

Would need to have clarity on last point alone, you stated that if we maintain EPF account(for 5 years) without withdrawing , tax deduction is not applicable. Can you explain that alone please since i couldnt understand

I have done online pf transfer twice successfully but this time i made a little mistake as my current company is Trust one so i should have opted for my current company but i choosed previous one apart from that i was not having idea that we have to mention trust details as well but system generated blank over there(but now when i tried to check whether i can do another online pf transfer only to test system generated all trust details and this happened after 4 days of submission). No w i am worried how the transfer will happen and what are the next steps after rejection.
One more thing when i checked previous company uan in uan member portal there is new row over there in passbook Claim Against PARA 57(1) but whole amout is not mentioend in row.
I think some process is going on.
Any idea about my query?

I dnt want to withdraw permanently,instead I want to take as a loan and repay it

I have another query which is irrelevant to this page,its regarding MFs
In which MF i can invest so that I can make atleast 3-5 lakhs after 3-4 years. I can invest a max of 4k/month starting from Feb’16

Dear Lakshmi,
To accumulate Rs 5 Lakh in 4 years with monthly investment of about Rs 4,000, your MF portfolio has to generate around 43% return pa. This is unrealistic expectation.
You may have to either increase the time-frame or monthly investment to achieve your target amount.
Read:Best Equity Mutual Funds for SIPs in 2016.

so what is the approximate max investment per month if I need to accumulate 5l in 3 years with best MF.also let me know is there any other investments so that I can accumulate the same with min amount per month

Dear Lakshmi,
You may have to save approx Rs 11k to Rs 12k per month assuming the expected returns to be around 10% for a 3 year time horizon.
You may consider investing in a balanced fund.
Read:Best Balanced funds.

Thank you so much for your clarification on PF (Employee and Employer Part)
But still i have dought on Pension (that is 8.33% of employer part):- please clarify me–
Q1. As i can see in your screnshot 1) there is NO interest amount added by end of financial year to the pension amount, why its so?
Q2. Did we get pension amnt transferd/withdrawled when we do the PF transfer/withdrawle:– again as you mention in another screen shot about the transfer money– there is NO money mentioned in pension part.

I worked for 9 month for an IT firm in Hyd (June 14 to Apr 15) and then moved to Bangalore and joined new company. I got my UAN from new company. How do I transfer my Hyd pf amount to present account. when I checked my pf balance, I get message as records not available and it shows in the site as last updated 12 Dec 14. I want to check the balance before transferring the amount.

I worked in an org for about 9 continued years. I quit recently and have not withdrawn my PF amount. Is it safer option to leave the amount in pf office for it to fetch interest or should I withdraw? Since I worked more than 5 years I am sure my amount will not be taxed. Secondly what happens to the EPS amount of 1250 set aside for all these months or years? Will it be given as well or is there any other clause attached to it?

Dear Anand,
You need to submit separate EPS withdrawal form. Check with your Ex-employer if you have not submitted it.
If you are currently not employed, you may withdraw EPF monies and can invest in other better investment avenues based on your Financial goals and profile.

Hi Thanks for detailed info. I hv one question? recently i hv changed my company and transferred all my pf amount from old account to new account. Amount along with interest is now transferred in my account, but even after 2 yrs I am only getting interest on the contribution I am making in my new company. No interest has been given for the amount trasferred from my old PF account to new account. Is there any rule pertaining this? I was under impression that old PF amount will be added up as carry fw balance for next yr to calculate interest. Pl clarify.

Thanks for the detailed information.
I have PF worth 90K. I have done service in a company “X” for 4years ,8 months and quit the job in jan 2015. I’m not continuing with any job for next 2-3 years.These are my questions:

a)If I keep the money in PF account for 3 years, will it earn interest?
b)Since I do not have 5 years of continuous employment, will it be taxed?
c)When we withdraw PF, will the pension fund also be given?

Please suggest , if it is good to keep in PF account for another 3years or withdraw the money.

I have a similar query.
I worked continuously in a company for 4 years 10 months and quit in May 2015. I am not employed right now. Since the withdrawal guidelines state that 2 months of unemployment is necessary, would that account for 5 years in total (4.10 years+ 2 months) and would withdrawing after 5 years make it non-taxable ?

Also, is it advisable to withdraw the amount right now when I am not employed as it falls in the 20% tax bracket and would be my only source of income so would bring the tax down to a great extend (given I earn nothing currently) or to keep it till the time I can.

Dear Sana,
I believe that as your contributions are for 4.10 years, TDS can be applicable.
The decision to withdrawal is dependent on your requirements. If you do not have any obligations , suggest you to withdraw and invest in some other better investment options as per your financial goals.

I have seen my EPF statement and understand the details of what employee and employer has contributed in last 7 years of my service. My question is how can i get the information about any money added because of the govt interest rates/schemes. I don’t see that in the statement.
I was planning to withdraw all money from my account and keeping it in FD for more benefits as i was not able to understand the benefit of keeping money in EPF. Please advise.

Thanks for your reply. Yes, i am currently employed and after going through the statement i thought where are the interest rates and thought may be idea of FD is better. There are no columns of interest credits in the statement and there is only monthly credited amount mentioned and there is no mention of interest credit. There is one additional row annually “Int. Updated upto 31/03/2013”; is it the interest rate and the row you are talking about?

I would need clarification on ppf interest calculated. When I see FD, I aM getting higher interest although the ROI is only 8.2%.
Although My total PPF is higher than 1 lac, I aM usually getting 2000-3000 rs only. If it is FD I should be getting More than rs 8000 p.a.

Sir
i joined in the month of Jan,2008 in p.ltd.co. at the age of 52 years,still i am doing my job,& the co.is deducting my p.f rs.1800 p.m.& they are not seperate the employer contribution as epf & eps what is the rule kindly confirm or

Thank you for your wonderful article and information on EPF related matters.

I read in some internet source that tax benifit cannot be claimed for principle or interest earned for employer contribution for EPFO scheme under section 10 (D) and other section at the time of retirement.

I would be thankful, if you can clarify whether both employee and employer contribution and its interest are tax free at the time of retirement or interest earned in employee contribution is only tax free ? What are the tax liabilities for employee and employer contribution ? I would be thankful, if you can eloborate this matter.

I worked in a company for 4 years and 6 months and withdrew my PF after 5 years due to travel abroad. During withdrawal the PF trust has deducted around 22% of the total settlement amount. Could you help me understand is TDS applicable here and if yes is this the right amount to be deducted?

I have worked on Company A from March 2006 to October 2008.
Then I shifted my job and worked on Company B from November 2008 to November 2011.
Then I shifted again to Company C and working there since November 2011.

Both my PF A/Cs in Company A and Company B remained unoperative until April 2015 as I did not transferred the balance in my old PF Accounts to the new Accounts.

I have initiated and get the balance transferred from PF A/Cs of Company A and Company B to Company C in April 2015 and the transfer has already been done and the balance is now reflecting in my New PF A/C.

However, the EPFO did not pay any interest on the amount accumulated on my PF A/Cs in Company A and Company B.

So, my question is:
1) Do I entitle to get the interest for the three years even though the balance transfer from old PF to new PF account is initiated after three year (as in my case)?

Dear Sandeep,
Company A – you have to get interest for the period from 2008 to 2011 (3 years) though no contributions were made, after that the epf a/c would have become in-operative.
Company B – you have to get interest for the period from 20011 to 2014 (3 years) after that the epf a/c would have become in-operative account.
Yes, you are entitled to get interest.
You may contact the nearest EPFO office for details. Contact details are available on EPFO website.

My salary was 4500 at exit,I have received 17615 in form 10c,so what was my service year calculated, 4year or 3 year.actually I have spent 6 years in job.but epf was deducted 1year later,now my account was inoperative,& epfo doesn’t say anything,except saying you have settled

I have been working from Feb 2013 for a company. I am planing to resign and moving to hometown. Also no more planing to work for any company. Can you help me on below given queries?

1. Can i keep the account without withdrawing money? Will the interest will be calculated up to 58 years?
2. If withdraw money how to get full amount without any tax?
3. Can i deposit money for each month as a self employment for each month?

Dear Mohan,
1 – Interest will be credited for next 36 months only. After that, the EPF a/c will be considered as inoperative one.
2 – You can not avoid tax. Tax is applicable.But, if you do not have any other income in a given Financial year then you can file ITR and get refund of any TDS that has been deducted, accordingly .
3 – No. You may consider PPF (Public Provident Fund)

If interest calculated fro 36 months can i leave it without encash?
And can i apply after 2 years to withdraw(i.e. completion of 5 yr period)?
So it is like 3 years operated account and 2 years In-operated account.

I have a question on the taxation of the EPF amount. If I work in a company for 3 years (throughout which the EPF contributions are made) and then I quit the company but do not withdraw or transfer the EPF amount. If I submit the papers to withdraw the EPF amount after 2 years
1. Will I be taxed as I have technically let my account be “alive” for a continuous period of 5 years?
2. Will I earn interest for the 2 years that I have not contributed?
Please clarify.
Thanks

Dear Sumitra,
The EPFO’s circular says ‘years of service’, so in this case TDS will be applicable. You will get interest, after 3 years of non-contribution the account will be treated as in-operative one and interest will not be paid.
kindly read my article – Inoperative EPF A/c .

you are requested to please give me advice that i will transfer the EPF from old employer to current employer account than the amount of pension contribution will be transfer along with employee share and employer share

i am due to retire on 30/06/2015.I understand i can keep my PF with my company;s PF Trust (recognized by GOI) for 3 years & interest received at the end of 3 year period is not taxable.Can u elaborate the income tax rule to claim exemption of above interest @.

I am in my 10th year of service. With X company 5.1 yrs and still working for Y. I did transfer PF from X to Y. Once I stop working and want to withdraw PF amount, do I still need to pay tax on my withdrawal amount ?

A person as resigned and joined a new company and transferred his PF account in Jun. Then in this case, Jul interest would be calculated as (current company employee contribution+End of month balance till Jun+Interest from prev month balance + previous company employee contribution).

One more doubt is whether the 6500 is maximum ceiling or minimum? If my salary including DA is 50000, does employer contributes 12% of 50000? I hope it is.
In that case, fo EPS too, is 6500 is minimum?
Thanking you in advance.

Thanks for your simple and crisp explanation on EPF Interest calculation. And it was exactly in time for me. I had been trying for it, but I used to get information in bits and still incomplete. Now I will start calculation and I hope I can get further help in case I find some difficulty.
Further I have a query on calculation of withdrawal benefit.
My basic pay when I retired on 31 -3 -2014, at the age of 60 – on superannuation, after completing 9 years of service was Rs. 30000/- Can you please tell me what is the amount of withdrawal benefit, I should get? Can you tell me the actual amount applying the chart in schedule D or so? Is it 6500*9.88= 64220? I was paid Rs.46345/- I dont understand.

Dear Sagar,
Is this your first job? Is 24% an optional one or is it mandatory?

If you want to save some taxes, and do not have sufficient life insurance cover then you may buy a good Term insurance plan. Do not buy money-back or an endowment policy. Kindly read my article – “Top 7 best online term insurance plans“.

Hi,
when I viewed the PF statement, it showed interest credited for the contributions made in 2014 – 15 (which is showing in correct amount only). However the statement doesn’t reflect the interest earned for the balance amount that is present till March 2014. Is this common or there is an issue here?
Kumar

Dear Aarti,
1 & 3 Funds are Small-Midcap oriented funds. So, you shortlist one fund. You may consider ICICI Pru Value discovery fund
2 & 4 – These are large cap funds. Both are equally good funds on all parameters. You can confidently invest in any one of them.

(if you want to leave your comments related to equity funds, suggest you to leave them after this post “Top Equity Funds.”)

Dear Nags,
Nice to see you here.
Legally, we should not withdraw PF and Pension (EPF & EPS), if we are joining a new company.
Yes, you need to submit withdrawal request for both provident fund and pension monies.